MLS team payroll: growing 3 times faster than inflation

In my last post I showed that the average MLS team payroll had increased by $746,214 from 2005 to 2009. It dawned on me this morning that the magnitude of such an increase may look small in comparison to other leagues where a single team's payroll may dwarf all of MLS's.

To put this into perspective, we can first look at how this compared to the average MLS payroll in 2005. In 2005, the average MLS payroll was $2,177,158, which means the increase from 2005 to 2009 was +34.27%. To compare this to the increase in cost of other commodities, I have broken it down into an average annual increase in payroll. All statistics other than MLS payroll are taken from December 2004 to December 2009.

• MLS Team Payroll = 7.6%
• US Inflation Rate = 2.3%
• US Health Care Inflation Rate = 9%-10%
• Gas = 10.5%

It is not clear how much of total team expenditure is spent on player salary. There certainly are other expenses - team travel, coaching staff, marketing, lease on the stadium, etc. But if labor costs, excluding benefits, are going up by 7.6% per year (more than three times the rate of inflation) we can begin to understand why, on average, the teams are concerned about payroll expenses in the new CBA.